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Last year, the market shrunk by nearly 15% from 2001 to $1.52bn.

Many companies decided to use proven tools that they had already in-house, according to IDC's Worldwide Third-Generation Language Tools Competitive Analysis 2003.

Demand for 3GL tools, particularly Java, will grow as the worldwide economy recovers. What will fuel growth are business and IT needs for increased developer productivity and a more rapid delivery of products and services to market.

This means web services and integration projects will be in demand, as well as tools which decrease the cost of development while increasing throughput and automatically generating code.

Because the installed base of tools may represent older technology, there will be little incentive to further invest in them when the economy improves. Companies will continue to use C++ and Java tools for some time before they look at new tools or integrated development environments (IDEs).

IDC 's report predicted that companies using Windows-based tools will start to look at Microsoft's C# this year.

Last year IBM's revenues were $512m and 33.7% of the 3GL market. Microsoft claimed a 12.1% share and revenue of $184m.

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